Real’s unreal deal

Engadget points to a New York Times article about Real’s half-off sale. Given that record executives would pimp their mama out for dollars, it is clear that Real is eating all the costs. Wonder what it will do to Real’s bottomline next quarter. The 49 cent songs and $5 albums are ITunes compatible. Real has jumped onto the blogging bandwagon and launched Freedom To Choose blog. “We know that at 99 cents a download even Apple isn’t making much profit, RealNetworksmust be losing more than just a pretty penny on each sale. PaidContent estimates, “RealNetworks will be losing about 40 cents on every song it sells. The company plans to tell investors its music fire-sale could directly add about a penny a share in losses to its third quarter financial results, equivalent to about $1.8 million. (PaidContent has a dedicated page for Real.) “Apple fans, now’s your chance to put them out business!” writes Engadget. Gizmodo says this “could be the start of the first legal music downloading price war. Apple probably won’t flinch (yet), but hopefully this is a sign of lower prices all around in the near future.” I think this is the last ditch gamble for Real. If this fails, well it needs to go figure out a new digital music strategy. Also expect this to soon enter the halls of corporate cock-ups, aka 101 Dumbest Moments in Business, Business 2.0’s annual list, right next to the Roxio-turning-to-Napster disaster.

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